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How The U.S. Tax And Spending Cookie Crumbles

By Don White

TheBudget of the United States Governmentis the President’s proposal to the U.S. Congresswhich recommends funding levels for the next fiscal year. The problem started when in 2010 Congress and the president did not pass a budget. This gave Washington the feeling that they had a mandate to spend as much money as possible, under the guise of controlling the recession. Because of that—and the fact that the new president, Barak Obama, went all out to create a larger government and leave his stamp on government the first two years because he didn’t know if he would be given a second term in office and wanted to make the most of his limited time.

House Speaker John Boehner (L) with Harry Reid of the Senate

He took George Bush’s deficit of $4.5 trillion up past anything anyone thought necessary or possible, $13.2 trillion. Now it is the job of a conservative, Tea Party-elected Congress to reign in this mad-hat big spender before there is no America to govern and China and the rest of the world calls in our debts.

.Last week Republicans thought they were working a miracle when they got Obama to agree to $38.6 billion in so-called “cuts.” But what were they cutting? Obama’s proposed spending or the deficit? As it turned out the correct answer was “none of the above.” Republicans and Democrats thought, through slight of hand, they could fool Americans into thinking Obama made huge concessions. He did not, and here’s why. Today as reported by Rush Limbaugh, most of that $38.6 billion was from unspent money already available. Rush figured only two-to-five billion dollars constituted real cuts.

Then you have to ask, what were they “cuts” from. We examined it and found they were only cuts from Obama’s requests, not from 2010 spending levels which they should have been to be meaningful. After a week of digesting the numbers, we find we really didn’t cut a darned thing. In fact, due to interest paid on China’s loans to the U.S., we spent more money during the day and a half while Congress and the president negotiated the phony cuts than the “cuts” of thirty-eight million themselves.

How’s that for being unproductive. Tea Party voters should be incensed. My guess is that members of the House of Representatives are angry with John Boehner, their speaker. If he were running for that position today, I wager he would lose—he is that unpopular with the rank and file members.

Several government agencies provided budget data and analysis. These include theGovernment Accountability Office(GAO),Congressional Budget Office, the Office of Management and Budget(OMB) and theU.S. Treasury Department. These agencies have reported that the federal government is facing a series of important financing challenges. In the short-run, tax revenues have declined significantly due to a severerecessionand expenditures have expanded dramatically, thanks to Barak Obama and the Democrats, for stimulus and bailout measures as Obama tried to pay back the unions, schools, Pell Grant supporters, and anyone else who helped him get elected in 2008..

In the long-run, expenditures related to entitlement programs grew considerably faster than the economy overall as the population matured and “baby boomers” retired. These includedSocial Security,MedicareandMedicaid

Budget principles

TheU.S. Constitution(Article I, section 9, clause 7) states that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of all public Money shall be published from time to time.” In other words, Congress holds the purse strings. If so, why doesn’t this congress cut back Why? Because they are afraid. They fear the Democreats and they shouldn’t. Republicans are in the majority in the House. Democrats have warned that if they don’t get what they want, and Republicans don’t negotiate, the government will have to shut down for lack of funds. Our troops would not get paid and government buildings would close, sending tens of thousands of government workers home without a paycheck.

My position is use what was spent in 2008 as a guideline and don’t appropriate any more money than that half or a third of figure (we are almost halfway through the year). This would solve the money escalation problem. But it would mean Republicans would be accused again of shutting down government. It’s merely a PR thing made possible because all of the big newspapers, radio and TV stations favor the Democrats. They would propagate the lie that it was the fault of the Republicans as they did in the mid-nineties under Bill Clinton.

I say, close government down. Close it down for two weeks or two months—as long as it takes to bang some sense into the heads of Democrats. Maybe the bad publicity of having stinking garbage piling up on Washington D.C. sidewalks and streets would make believers out of such Democrats as Harry Reid, Barak Obama, John Kerry, Chuck Schumer, and Barney Fife—oh, I erred, I mean Barney Frank, the man who grows marijuana in his Boston backyard.

So I return to whose lap the fault for all of this confusion lies. It is that of Barak Obama and all the progressive Democrats who did not pass a budget.

The law is clear. Each year, the President of the United States must submits his budget request to Congress for the following fiscal year as required by theBudget and Accounting Act of 1921. Current law (31 U.S.C.§ 1105(a)) requires the president to submit a budget no earlier than the first Monday in January, and no later than the first Monday in February. Typically, presidents submit budgets on the first Monday in February. Obama conveniently forgot about this process and went on a spending binge. Congress has been a big club. You don’t tell on me and I’ll hold you harmless. that’s got to stop. It’s about time Congress passed term limits. One Senate term and two for the House. Do you think they–even these Tea Party advocates–will do so? Hell could freeze over before that will happen. Unless….unless we get rid of all the old-timers–Republicans and Democrats alike–in November 2012 and make them promise to pass term limits and make sure the president is conservative enough to understand this important principle of keeping government close to the people.

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The federal budget is calculated largely on a cash basis. That is, revenues and outlays are recognized and federal agencies cannot spend money unless funds are authorized and appropriated. That’s where Democrats broke the law and now they are to be punished. That is if John Boehner, Eric Cantor and Paul Ryan have the spleen to do so—which is doubtful.

Typically, separate Congressional committees have jurisdiction over authorization and appropriations. The House and Senate Appropriations Committees currently have 12 subcommittees, which are responsible for drafting the 12 regular appropriations bills that determine amounts of discretionary spending for various federal programs. Appropriations bills must pass both the House and Senate and then be signed by the president in order to give federal agencies legal authority to spend. These agencies have been breaking the law and also should receive some punishment, but I doubt Obama, Boehner, and Reid have the guts to do so.

Congress may also pass “special” or “emergency” appropriations. Spending that is deemed an “emergency” is exempt from certain Congressional budget enforcement rules. That’s how we have been operating since 2009.

Funds for disaster relief have sometimes come from supplemental appropriations, such as afterHurricane Katrina. In other cases, funds included in emergency supplemental appropriations bills support activities not obviously related to actual emergencies, such as parts of the2000 Census of Population and Housing. Special appropriations have been used to fund most of the costs of war and occupation inIraqandAfghanistanso far. Every month Congress has been put upon to pass special appropriations bills to keep the government from shutting down. In two weeks we shall have another budget crisis. Will John Boehner get the message that it is now time for him to stiffen his back and refuse to negotiate with the president on anything? Boehner should use the one power he has, that is threat of shutting the government down, to get what the American people want—drastically reduced spending. Make real cuts this time.